November, 2022
One main reason sellers are often hesitant to come to market is because they can’t find somewhere that they want to buy, but with record buyer demand there seems to be a lot of people choosing to sell up and rent temporarily.
A property chain is a sequence of linked house purchases, each of which is dependent on the preceding and succeeding purchase.
Selling chain-free is something vendors hadn’t considered as a possibility before now, but with the competitive market and stock shortage we currently have they’re trying to put themselves in a more attractive position when their dream home comes along.
Take a look at our 5 tips on how to break a property chain:
Look for chain-free buyers
One way to break the chain is simply by choosing a chain-free buyer.
Illustration of a housing chain. When one seller agrees a sale with a chain-free buyer, the chain stops.
One easy way to break the chain is to agree a sale with a chain-free buyer. As you can see, the chain stops with them.
You won't always get the chance, but you might get this opportunity if you have several parties willing to make an offer on your home.
This is why it's important that your estate agent properly qualifies each buyer who submits an offer: You need to know how they plan to finance the purchase of your home, and if they have a complicated chain behind them.
Examples of chain-free buyers to look out for include:
Each of these will usually be able to purchase from you without selling anything first.
It can be a good idea to opt for a buyer with no chain even if their offer is a little lower. The quicker and more certain sale can be worth the trade-off on price.
Another way of breaking the chain is to buy a house with no onward chain. If the owners of that property don't need to buy another home before they can sell to you, you'll have broken the chain. These properties are often advertised saying "no chain" or "no onward chain".
Examples of properties with no onward chain include:
In other words, if the owner of the property already has somewhere else to live, they won't need to buy before they can sell to you. This breaks the chain, and will mean a faster and easier house move for you.
This one's a little less obvious. You can actually break the chain yourself.
As we've covered, house chains happen when you need to sell one house so that you can buy your next, and you need to buy your next house so you can sell yours.
Here are some examples of how you can make yourself “chain-free”
A great way to break the chain is to sell your house and move into rented accommodation. This way, you can sell your house as soon as possible, rather than delaying things until your onward purchase is also ready.
This isn't an option for most home movers, but some will be able to buy without needing the cash from the sale.
This means you can go ahead and buy your new home before the sale of your existing one goes through.
Here are some ways you could do this:
Get a 2nd mortgage. Speak with a mortgage broker and see if you'll be able to have two mortgages at once. It depends heavily on your situation and finances. But a good mortgage broker will help you determine if this is an option.
Buy with a bridging loan. If conventional mortgages aren't an option, a bridging loan may be. Bridging loans are like short-term mortgages. Bridging lenders tend to be more flexible and accommodating than traditional mortgage lenders. The rates can be very high though, and you need to be very careful not to exceed the term of the loan (which is usually about 12 months).
Buy with cash. Of course, if you have the cash lying around to buy your 2nd home, you won't need a 2nd mortgage or a bridging loan.
If none of the other 3 tips have worked for you, the next suggestion for breaking the chain is to try and make someone else chain-free.
This is a good option to explore if someone further up the chain is causing delays because they've haven't found where they want to buy yet.
This something your estate agents should be working towards to try and get the sale moving as quickly as possible.
If they haven't even found where they want to buy yet, it's probably safe to expect that moving day is still at least 3 months away.
That's a lot of time for something to go wrong elsewhere in the chain, and if it does, then they're going to lose everything as well.
So it's actually in their interest to get moving.
You could even offer to help contribute to the costs the other party will incur if they move into a rented property. Increasing your offer slightly is probably the easiest way to do this.
It can feel uncomfortable offering to pay someone else's rent. But if it gets you moving, then why does it matter what the money's going towards?
You may even be able to get others in the chain to make a contribution as well. After all, it's going to speed up their moves too.
This can be a really effective option if there's one person really holding things up.
As we established earlier, house sales fall through, it happens. The more transactions there are in your chain, the more likely it is that a fall-through could occur.
Rather than waiting for another buyer (who may even come with their own chain), you could opt for a genuine house-buying company.
These companies work by purchasing your home at a discount in exchange for a quick and certain sale. Their service is perfect for breaking the chain and getting things moving right away.
Remember, the discount can be spread across the chain as well. This means everyone takes a smaller reduction on the price, and everyone gets moving much sooner.
For more information on breaking a chain, call us on 0121 430 4448 or email your enquiry to enquiries@hshomesofsolihull.co.uk.
